Prospects for an increase in the federal minimum wage brightened Tuesday when Barack Obama endorsed the idea for the first time since he became president, but it still faces a tough road in Congress.

With unemployment stubbornly high and employers apprehensive about their health care costs when major parts of Obamacare take effect in 2014, critics say now is not the time to be raising the minimum wage. And if the goal is reducing poverty, raising the minimum wage is a "poorly targeted" way to do it, says Michael Saltsman, research director with the Employment Policies Institute.

He says many minimum-wage workers are teens living in middle- or upper-income households and that 60 percent of people living below the poverty line don't work and would not benefit from a higher wage.

Proponents say minimum-wage workers are predominantly adults and long overdue for a raise. Giving them one would provide a "modest economic stimulus" because they are likely to spend every extra dollar they get, says Jack Temple, a policy analyst with the National Employment Law Project.

The federal minimum wage for most workers has been stuck at $7.25 per hour since July 2009. Adjusted for inflation, it would be around $7.80 today, says David Cooper, an analyst with the Economic Policy Institute. Adjusted for inflation since its heyday in February 1968, it would be $9.86.

A full-time worker earning minimum wage would gross $15,080 a year, roughly equal to the poverty level for a family of two.

In his State of the Union address, Obama called for increasing it in stages to $9 by the end of 2015, and indexing it to inflation thereafter. He didn't specify the stages, but Cooper's understanding is that it would go to $8 this year, $8.50 next year and $9 in 2015.

Nineteen states and the District of Columbia already have minimum wages above the federal version. The highest are Washington ($9.19); Oregon ($8.95); Vermont ($8.60); Connecticut, Illinois and the District of Columbia ($8.25); and Massachusetts and California ($8). Nevada is $8.25, but only for those without health benefits.

Some cities also have minimum wage ordinances. San Francisco's $10.55 is the highest in the nation. Employees in San Jose must earn at least $10 per hour starting March 11.

Compared with 24 other developed countries with minimum wage laws, the United States ranked 11th in 2011, according to the Organization for Economic Cooperation and Development. Australia had the highest minimum wage ($15.75 per hour in U.S. dollars) and Mexico had the lowest (58 cents).

Bill coming

Iowa Sen. Tom Harkin said Wednesday he is working on a bill with Rep. George Miller of Martinez to raise the minimum wage to $10.10 an hour by 2016. The two Democrats introduced a bill last year that would have raised it to $9.80 by 2014, indexed it to inflation and increased the minimum wage for tipped employees to 70 percent of the full minimum wage.

The federal minimum for tipped employees has been $2.13 an hour since 1991, although employers must guarantee that they make at least $7.25 an hour including tips. Five states (including California) don't have a lower minimum for tipped employees.

A minimum wage bill has a better chance of passing this year "because the president has put it on the agenda," Temple says. Cooper says its prospects have improved because of growing attention to income inequality.

But Republican House Speaker John Boehner wasted little time shooting it down. "When you raise the price of employment, guess what happens? You get less of it," he said Wednesday.

Saltsman opposes a higher minimum wages because "the evidence suggests they are not terribly effective at reducing poverty rates."

Arguments against

Researchers at Cornell and American universities studied 28 states that raised their minimum wage above the federal level between 2003 and 2007 and found no associated drop in state poverty rates. They estimated that only 11.3 percent of workers who would gain from an increase in the federal minimum wage to $9.50 live in poor households. By contrast, 63.2 percent are second or third earners (such as teens) living in households with incomes over twice the poverty line, and 42.3 percent were in households with incomes three times the poverty line.

Saltsman says a better approach would be increasing the earned income tax credit, which can reduce a low-income worker's income tax below zero and result in a net payment from the government. "It's a wage supplement that operates through the tax code instead of a mandate on employers," he says.

He says there is also a risk that employers forced to pay higher wages will cut employees' hours, leaving them worse off.

Arguments for

Cooper shoots down those arguments. "The vast majority of minimum-wage workers are not teenagers," he says.

In 2011, 23.5 percent of workers earning at or below the federal minimum wage were 16 to 19, according to Bureau of Labor Statistics data. (Workers can earn less than the minimum wage because some are exempt, such as those working at companies with less than $500,000 in revenues, unless they are involved in interstate commerce. Also, employers can pay new hires younger than 20 as little as $4.25 an hour for up to 90 calendar days, unless states or cities require a higher wage.)

If the federal minimum wage rose to $9 per hour, everyone making between $7.25 and $9 would benefit. Of those workers, only 15 percent are teens, Cooper says.

While he supports the earned income tax credit, raising it to fight poverty "is subsidizing companies with public dollars for not paying their employees enough," he says.

Cooper adds that "some of the best research shows that when states raise minimum wages there is no negative effect on job creation and some evidence that it can have a positive effect," such as reducing turnover and increasing productivity.

Although the odds of a federal minimum wage hike have increased, there's no guarantee it will pass this year or anytime soon. It was stuck at $5.15 for a decade before it finally increased in 2007.

Minimum wage by country

Hourly minimum wage, in U.S. dollars, for 24 countries that are members of the Organization for Economic Cooperation and Development